This paper aims to review the post-crisis macroeconomic adjustment and the impact of policy responses on the real economy in Korea and Malaysia. While both countries suffered under the Asian financial crisis, their policy responses were quite different. Korea sought liquidity assistance from the IMF, which obliged it to comply with the IMF's structural adjustment program, while Malaysia was able to maintain policy independence in the process of crisis resolution. Korea and Malaysia adopted policies at opposite extremes in terms of capital market opening in response to the crisis. For example, Korea drastically liberalized its capital account (but kept a few restrictions of capital outflows by residents) with a free floating exchange rate regime, while Malaysia implemented more stringent capital controls with a return to a fixed exchange rate regime. Despite the different policy stances in terms of capital account and exchange rate regime, the swift change toward an expansionary macroeconomic policy stance helped the two economies recover quickly. The positive role of counter-cyclical macroeconomic policies in the post-crisis recovery raises the question of whether the initial tightening of monetary and fiscal policy was kept high for too long and as a consequence deepened the crisis in Korea.